Market Turmoil Following Ethereum’s Price Plunge
The recent drop in Ethereum’s price to $1,400 has sent shockwaves through the cryptocurrency market, intensifying an already unstable environment. This significant downturn is believed to be primarily influenced by a substantial sell-off of ETH by World Liberty Finance, a decentralized finance protocol associated with former US President Donald Trump. Blockchain analytics platform Lookonchain reported that this wallet’s activity occurred just before Ethereum’s rapid price decline, prompting speculation that it may have played a crucial role in the recent market fluctuations.
World Liberty Finance’s Controversial Move
Established in 2024, World Liberty Finance aims to challenge traditional banking systems and promote the use of stablecoins. Recent data from Lookonchain indicates that the firm, which had been acquiring Ethereum at lower prices, recently decided to offload a significant portion of its holdings at a considerable loss. In a notable transaction, World Liberty Finance reportedly sold 5,471 ETH tokens, valued at around $8.01 million, at a price of $1,465 each—well below its previous valuation exceeding $1,600.
Impact on Ethereum’s Market Sentiment
This unexpected sell-off by World Liberty Finance has raised concerns within the cryptocurrency community, signaling a potential change in strategy for an entity previously known for accumulating large amounts of ETH. According to Lookonchain, this wallet had previously amassed a total of 67,498 ETH, purchasing them at an average price of $3,259, resulting in an eye-watering unrealized loss of approximately $125 million at the time of the sell-off. This event only adds to the existing uncertainty about Ethereum’s future, as the recent price drop fuels pessimistic forecasts regarding its market trajectory.
Ethereum’s Price Decline and Market Reaction
Ethereum’s descent to $1,400 marks a significant milestone, being the lowest point for the cryptocurrency in seven years. Notably, this downturn was not isolated to Ethereum, as major cryptocurrencies like Bitcoin also faced declines amid the market’s instability. However, Ethereum has shown some signs of recovery, currently trading around $1,591 after a 7.44% increase. Despite this small rebound, the cryptocurrency has still experienced a 16.63% decrease over the past month. Technical analysis from CoinCodex suggests that market sentiment remains largely negative, indicating the possibility of further declines in the near future.
